Estimated warranty liability

Assignment Help Financial Accounting

Reference no: EM13787722

During 2010, Eaton Co. introduced a new product carrying a 2-year warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2010 and 2011 are as follows:

Actual Warranty

Sales Expenditures

2010 $ 800,000 $12,000

2011 1,000,000 30,000

$1,800,000 $42,000

At December 31, 2011, Eaton should report an estimated warranty liability of

$0.

$10,000.

$30,000.

$66,000.

Reference no: EM13787722

Questions Cloud

What is minimum acceptable selling price for the new product : Nations Corporation has designed a new product, K48, whose variable cost is $57.50 per unit and that requires 3.40 minutes of the constrained resource. The opportunity cost is $40.30 per minute used of the constrained resource. What is the minimum ac..

Advantages and disadvantages of two forms of managed : Advantages and disadvantages of two forms of managed care capitation and fee for service

Tax consequences of the distribution : Tar Heel Corporation had current and accumulated E&P of $500,000 at December 31 year 1. On December 31, the company made a distribution of land to its sole shareholder, William Roy. The land's fair market value was $100,000 and its tax and E&P basis ..

Write a journal about when going gets tough a not-so-tough : Write a journal about When Going Gets Tough, a Not-So-Tough Turns to Meth By ALESSANDRA STANLEY.

Estimated warranty liability : During 2010, Eaton Co. introduced a new product carrying a 2-year warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale. S

State two advantages of developing this career tool : Provide your overview of five portfolio components you can include as you begin the process. Refer to the text on pages 5-7, to complete this assignment. Indicate in a 1-2 page paper what items you have ready-to-go and what you still need to research..

Record accrued interest payable : On September 1, 2010, Herman Co. issued a note payable to National Bank in the amount of $1,200,000, bearing interest at 12% and payable in three equal annual principal payments of $400,000. On this date, the bank's prime rate was 11%. The first paym..

Strategies to cope with stress and promote wellness : Describe the physical, emotional, and cognitive effects stress can have on an individual. Explain two to three effective strategies that can reduce stress.

Customers receive a leash : Mott Co. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Mott $2.00 each. Mott estimates that 40% of the coupons will be redeemed.

User Account

All Pages